Mayor Jerry Sanders pledged the financial problems that have plagued San Diego for the past decade — a chaotic era of escalating pension costs and devastating budget cuts for America’s Finest City — will end before he leaves office in December and make way for a new period of growth and prosperity.

Document

In his seventh and final State of the City address, Sanders said Wednesday he also plans to shepherd several major civic projects to reality, from a new Chargers stadium to a convention center expansion to a makeover of San Diego’s crown jewel: Balboa Park.

To emphasize his point of closing his tenure strong, Sanders took the stage to sound of AC/DC’s “Hells Bells,” which was the favored introductory music for former Padres closer Trevor Hoffman.

“I promise we won’t give an inch to those who doubt this city or would hold it back out of self-interest. Not now, not ever,” Sanders said at the downtown Balboa Theatre. “We will be fearless, and we’ll finish what we started, closing the deal on civic projects that take San Diego to the next level of greatness.”

Sanders didn’t stray too far from the well-worn path he has tread in previous speeches. He focused on past successes, promised to resolve pension and budget issues and urged the city to think big for the future. Sanders did give new details on one of his legacy projects. The new downtown library currently under construction will move forward with its second phase — building the interior — thanks to generous donations from private citizens.

In an interview, Sanders said the private fundraising drive fell about $15 million short of closing the library’s $32 million funding gap, but an unnamed donor has guaranteed the rest of the money.

Lani Lutar, president of the San Diego County Taxpayers Association, said the mayor presented a bold vision but many of the projects lack sufficient details at this point.

“Time will tell whether they’re truly good for taxpayers, but I think what we got out of today’s speech is that the mayor is going to be a very strong advocate and aggressive in pushing them forward,” she said.

The speech was interrupted shortly after it began by Occupy San Diego protesters, who were removed by police as the crowd chanted “Jerry” to drown out them out. Four people were arrested.

Sanders, a Republican who is exiting because of term limits, inherited a financial quagmire when he won a crowded special election in 2005 to replace ex-Mayor Dick Murphy. The city was saddled with a billion-plus pension deficit after decades of shortsighted decisions by past city leaders. Operations were such a mess that the city didn’t even know what properties it owned. And dysfunction was the modus operandi at City Hall.

Sanders entered this unstable environment, navigated through the pension morass and slowly began to reshape how city government operated. During his tenure, the city eliminated 1,700 budgeted positions, began to put certain services up for competitive bid, reduced pension benefits for new hires significantly and stopped the decades-long habit of ignoring pension and retiree health obligations.

One persistent problem, however, has been the annual budget. Sanders has often used one-time fixes, such as tapping reserves, to avoid painful cuts and kick the can down the road. He said that practice will stop this year when he closes a $31.8 million deficit in the city’s $1.1 billion operating budget, truly balancing it for the first time in decades.

“Credit for that success is too great for any one person,” Sanders said. “It belongs to all of us. It belongs to everyone in this room, and outside its doors, who understands that success begins with a unity of purpose — and that we all benefit from a city that works, and a city that works together.”

Sanders isn’t without detractors.

Union leaders have been upset with his decision to force pay cuts on some workers and are adamantly opposed to his proposed initiative to replace guaranteed pensions with a 401(k)-style plan for most new city hires. Others criticize Sanders for not going far enough with certain reforms and the severe cuts he made to parks, libraries and public safety over the years.

Labor leader Lorena Gonzalez compared the mayor’s speech to “lukewarm porridge” as it didn’t address how to help struggling working families.

“Tonight’s speech sounds a lot like the same to-do list that Mayor Sanders has given us in every single State of the City address since he was elected,” she said. “It’s disappointing that he won’t be able to have more accomplishments checked off when he leaves office in 11 months.”

While Sanders’ time is winding down, the race to replace him is ramping up with four high-profile candidates and a dozen others vying for the job. They include City Councilman Carl DeMaio, District Attorney Bonnie Dumanis, Rep. Bob Filner and state Assemblyman Nathan Fletcher. All but Filner were in attendance Wednesday.

The mayoral primary is June 5.

Key issues, projects discussed by Sanders:

Chargers stadium

Description: Sanders reiterated his support for a new $1 billion football stadium project in downtown San Diego’s East Village. The mayor and the team had publicly pushed separate ideas for months, but the two sides announced earlier this week that they are now on the same page. The biggest hurdle is going to be how much public money is invested in the project, with the Chargers seeking hundreds of millions in taxpayer dollars to make it a reality. Sanders says his plan includes no tax increase, regional support and a return on the city’s investment. The financing plan, whatever it may be, is expected to go for a public vote in November, or possibly in a special election in the spring of 2013.

What’s next: Sanders plans to release a stadium financing plan before the end of March.

Sanders: “As we discuss potential financing models with county leaders and the NFL, they know our goals must become shared goals. If we do this the right way, the Chargers, our city and our region will all be winners.”

Convention Center expansion

Description: The push for a $520 million expansion of the San Diego Convention Center will depend on whether hoteliers are willing to add a surcharge to their bills to finance the project. Under the current plan, downtown hotels would be assessed 3 percent; those in Mission Valley, Mission Bay and Harbor Island would add 2 percent; and all others would face a 1 percent increase. Opposition is mounting from hoteliers furthest from downtown who say the expansion won’t benefit them nearly as much as downtown hotels. The council voted 6-2 in favor of a special financing district for the assessments in December.

What’s next: Hoteliers are scheduled to vote on the plan in April. If two-thirds approve, they would begin making payments in January 2013.

Sanders: “They (hoteliers) understand this astute investment will yield a lifetime of revenue, and that we must get it done by 2016 to hold on to the most lucrative conventions, like Comic-Con, that call San Diego home.”

Balboa Park

Description: The $40 million project, to be financed largely by Qualcomm co-founder Irwin Jacobs, calls for eliminating cars and parking from the heart of Balboa Park by building a bypass road to divert traffic from the Cabrillo Bridge. The goal is to create a pedestrian-friendly area ahead of the centennial celebration of the Panama-California Exposition in 2015. Sanders calls it an “elegant solution” that won’t cost taxpayers a dime thanks to Jacobs, but the creation of a bypass bridge has raised concerns about how it impact the park as a whole.

What’s next: An environmental impact report is due soon with a City Council vote expected in July. If approved, construction would begin in October.

Sanders: “I invite everyone to learn more about this ingenious plan to enrich the Balboa Park experience by putting people first, and allowing them to once again enjoy its historic plazas and gardens without having to compete with cars.”

Budget deficit

Description: The tenure of Jerry Sanders has been one of constant budget woes and cuts to city services thanks to the fiscal crisis he inherited and an economic recession. He eliminated roughly 1,700 positions from the city budget and, with City Council approval, began putting certain services up for competitive bid to reduce costs. But Sanders has also frequently relied on one-time budget fixes, such as reserve holidays, to avoid even harsher cuts. He pledges to end that practice this year so his successor can start with a clean slate.

What’s next: The city faces a $31.8 million deficit in its $1.1 billion operating budget for the fiscal year that begins July 1. Sanders will release his proposed budget by April 15, possibly with another round of cuts.

Sanders: “The plan I propose in April will clear the path for a five-year forecast that shows balanced budgets for the foreseeable future and, with the City Council’s support, our structural deficit will finally be solved. Credit for that success is too great for any one person. It belongs to all of us.”

Library

Description: The $185 million library broke ground in downtown San Diego in July 2010 despite being $32 million short of the funds needed to complete the building’s interior. A private fundraising has been trying to collect enough money to cover that gap since. Sanders says “the generosity of so many San Diegans” has allowed the project to move forward with the second phase and keep the library on track to open next year. What he didn’t say in his speech is that an unnamed private citizen has guaranteed the remaining $15 million for the project that has yet to be raised.

What’s next: Construction continues with an opening scheduled for July 2013.

Sanders: “A building of architectural distinction and unmistakable importance, the Central Library is a shining example of what can be accomplished even in the worst of economies if you have faith in San Diego and its people.”

Pension reform

Description: Saddled with a billion-plus pension deficit created by predecessors, Sanders and the City Council have taken significant steps in recent years to reduce the future cost of workers’ retirement benefits. Pensions were reduced for new hires in 2009. Current employees have gone without pay raises for the past three years and continue to receive a 6 percent cut to overall compensation. Sanders says the last major step is to pass an initiative he crafted with council members Carl DeMaio and Kevin Faulconer that would eliminate pensions for most new hires — not police officers — in favor of a 401(k)-style plan.

What’s next: The initiative, which faces a legal challenge, is expected to go before city voters in June.

Sanders: “Through pension reforms we’ve advanced — working with our labor unions, with civic leaders, and at times by appealing directly to voters — we’re striking the proper balance of benefits that are fair to employees and the taxpayers they serve. And by the time I leave office, we’ll have put our pension problem to bed once and for all.”

By the numbers

$2.1 billion

San Diego’s pension deficit

$231 million

City’s annual pension payment

$1.2 billion

Minimum projected savings over 27 years of 401(k) initiative by supporters